Weathers Catering Supply, Inc., needs to borrow $145,000 for 6 months. State Bank has offered to lend the funds at an annual rate of 8.6% subject to a 10.4% compensating balance. (Note: Weathers currently maintains $0 on deposit in State Bank.) Frost Finance Co. has offered to lend the funds at an annual rate of 8.6% with discount-loan terms. The principal of both loans would be payable at maturity as a single sum. a. State Bank's semi-annual rate is ? (Round to two decimal places.) State Bank's effective annual rate is ? (Round to two decimal places.) Frost Finance's semi-annual rate is ? (Round to two decimal places.) Frost Finance's effective annual rate is ? (Round to two decimal places.)

Weathers Catering Supply, Inc., needs to borrow $145,000 for 6 months. State Bank has offered to lend the funds at an annual rate of 8.6% subject to a 10.4% compensating balance. (Note: Weathers currently maintains $0 on deposit in State Bank.) Frost Finance Co. has offered to lend the funds at an annual rate of 8.6% with discount-loan terms. The principal of both loans would be payable at maturity as a single sum. a. State Bank's semi-annual rate is ? (Round to two decimal places.) State Bank's effective annual rate is ? (Round to two decimal places.) Frost Finance's semi-annual rate is ? (Round to two decimal places.) Frost Finance's effective annual rate is ? (Round to two decimal places.)

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter16: Working Capital Policy And Short-term Financing

Section: Chapter Questions

Problem 19P

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